Sunday, November 30, 2008

Obama Moves from Eight Years of Private Healthcare Solutions

President Barack Obama promised to address America's legions of uninsured citizens during his political campaign. The number of uninsured and underinsureds grew by tens of millions the last eight years. President George W. Bush relied on the private health care system to produce the best, most efficient, cost effective health care.

Financial pressure impacted nonprofit community and teaching hospitals disproportionately. Three large charity hospitals haven't reopened in Gulf Coast communities devastated by hurricanes. While CitiBank got $45 billion in cash and hundreds of billions more in loan guarantees, John Sealy Hospital in Galveston begs with its hand out at state and federal houses. CitiGroup fired 52,000 employees so Uncle Sam could get a return on its preferred stock investment. John Sealy let 3,000 health care professionals go, while it struggles to restart critical services.

Financially strapped nonprofit hospitals considered selling out to their for-profit brethren the last few years. Such a merger was announced in my hometown, but it later failed. One might expect a little compassion for institutions carrying the burden of caring for all who present. I've yet to see it.

The Washington Post reported on wide variations in health care practice and costs in various regions of the U.S. Much of our expensive care is delivered in the last two years of a person's life. The piece stated:

A Dartmouth team concluded that as much as 30 percent of medical spending -- or $700 billion -- does nothing to improve care.

Even if only a third of that could be invested in critical programs, "imagine the possibilities," said Peter Orszag, head of the Congressional Budget Office, who was nominated last week to be director of the Office of Management and Budget in the Obama administration. "Given the scale of it, I am puzzled as to why we are not doing more to improve the efficiency of the health system."

Peter Orzag, please look up the history of DRG's and HMO's in America. They were efforts to improve the efficiency of the health care system. President Bush pushed the ever efficient private health care marketplace as the tonic for America's ills. Yet, that hasn't worked so well.

The WaPo article cited expert advice:

A high-performance 21st-century health system, they say, must revolve around the central goal of paying for results.

Horse hockey! It must revolve around the central goal of improving processes. That requires an understanding of variation, systems, psychology, and knowledge, along with their interactions. Results or outcomes can only be improved by changing the underlying processes.

America saw the distorting impact of "paying for results" with Wall Street executive incentive compensation. Health care "pay for performance" will cause similar suboptimization as providers do whatever it takes to get the reward. How many will cook the charts, like their CEO counterparts did with their books? How many will steer their patient load to already healthy patients, like executives steered stock option award dates to maximize their future bounty? How far will the ethics bar fall to garner the reward?

Providers have a long history of adapting to carrots and sticks, whether they came from government or private insurers. They will adapt to whatever Peter Orzag, Tom Daschle, Max Baucus and President elect Obama put on the table. I just hope America's nonprofit community hospitals have a good seat and that Dr. W. Edwards Deming's teachings are foundational for planned change.

People in health care have a good job to do. It's time to build a more optimal system, one that works for 300 million of us. If we can afford $7 trillion to save our financial system, filled with tainted Tylenol like products. we can afford to transform our health care system and its tattered safety net.

The early lingo points to a U.S. Chamber of Commerce approach, where employers need relief from expensive health insurance benefit costs. But Barack Obama is yet to take office. It will be interesting to see the frames used as our federal leaders tackle health care reform.

Let's hope its not part of the drive to a global lowest common denominator on worker pay and benefits. The big money boys are loath to step up to the plate.

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